Moody's downgrades Dunn Paper

Moody's Investors Service said it sliced Dunn Paper Holdings, Inc.’s senior secured revolver and senior secured first-lien term loan ratings to Caa3 from Caa1 and the senior secured second-lien term loan rating to Ca from Caa3.

The agency also downgraded the corporate family rating to Caa3 from Caa1 and the probability of default rating to Caa3-PD from Caa1-PD.

“The downgrade reflects an increased likelihood of default, restructuring or a distressed debt exchange given continued high pulp prices due to logistics disruptions. The downgrade also reflects weak liquidity, near-term covenant issues and refinancing risk with both the revolver and the first-lien term loan maturing in August 2022,” Moody’s said in a press release.

The outlook remains negative.

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